How do we create investment strategies?

Many of our clients ask us about the process our Portfolio Strategies Team uses to research market trends and how we create our investment strategies.

Our investment strategy process

Our process begins with each of us on the Portfolio Strategies Team conducting our own research and data gathering. Then, picture me walking into our daily team meeting to facilitate the sharing our findings in a bullet point fashion, followed by health debate and brainstorming.

Trends, data and research

Here are some recent bullet points we are debating and researching now:

The economic growth, since the recovery began mid-2009, will continue to be lower than previous post recession recoveries.

It could be a full 4 years before the Fed is in a position to raise interest rates.

The Great Recession still persists for most Americans. Real hourly wages have risen only 0.7% since the recession ended and are 7.5% below the 1973 level.

Birth rates continue to fall. Last year the U.S. birth rate was 600,000 below trend.

The Fed has used up most of its ways to improve the U.S. economy. The Fed can raise or lower short term interest rates and buy and sell securities. The Fed had hoped quantitative easing would create a rise in stock prices and other asset prices that would inspire consumers and businesses to spend money. That hasn’t really happened.

The unemployment numbers are tainted. The government will tell you it is 5.8% but the reality is closer to 13% due to the aging and retirement of baby boomers, as well as discouraged job seekers who have given up.

These are just a small handful of the trends, data and research we are looking at and debating as a team when we are developing investment strategies. As all five of our Portfolio Strategies Team members meet every morning and throughout the day, we are looking at every angle to create investment strategies designed with the goal to grow our clients’ wealth.

New market update

I will have a new market update letter going out to our clients next week with these bullet points and more as we look for new investment strategies. Please email me here or call me at (205) 989-3498 if you would like to talk with me about your investments or market concerns.
Greg Powell, CIMA
President/CEO
Wealth Consultant

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Greg Powell is President and CEO of fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Stock investing involves risk including potential loss of principal. No strategy ensures success or protects against a loss.

One of the biggest stories in the news for the past several weeks has been about the demise of the Russian economy and falling oil prices. The cause has many factors all of which are interrelated. The political unrest in Russia stems from falling oil prices but much of this started back in the 80’s.

The biggest problem for Russia

Russia is, and has been, a major exporter of many products from oil to diamonds. Because oil is such a large part of the Russian economy, the recent price drop is hurting them severely. This has caused a fast and tremendous decline of the Russian Ruble.

The catch-22 of low oil prices

Obviously, we all love going to the gas station and buying gas for less but falling oil prices really is a catch-22. For the consumer, it’s great to have low oil prices because it puts more money in their pockets. This can help the economy as consumer confidence and spending rises. These low prices, however, can hurt the economy by keeping new jobs from being created and preventing the purchasing of capital expenditures.

What this means for the investor

As consumers, falling oil prices are great for our day to day lives. For consumers who are also investors, falling oil prices are bringing volatility to the markets which can bring down the value of their portfolio.

You can see why it’s important for investors to keep an eye on their investments and stay up to date on economic news. This is why we have an entire team at fi-Plan Partners dedicated to doing just this for our clients.

We will keep you updated as this catch-22 evolves over time. Please call us with your questions or comments.

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fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Big moves in energy stocks

Energy stocks have moved greatly since there has been a very big slide in oil prices since the summer. Since June of this year, the price of oil has dropped about 38%, going from $100 per barrel to $66 per barrel. When you have technological ways of doing business breaking down, it disrupts that model. This has happened to the oil industry.

Investing in energy stocks

This means there will be a lot lower input costs for many industries throughout the economy. But you can’t just buy a lot of stock in one particular sector, especially energy stocks. The recent gas drop has helped some oil companies while it has hurt others.

Important characteristics of a energy stock company

The oil companies that will survive this price drop have multiple lines of business, strong balance sheets with low debt and good cash on hand, and a senior management team that can act in a protracted level in a lower cost environment. The oil companies that don’t have these characteristics will lose market value.

Investors should gravitate towards energy stocks of the larger companies that have these components. Investing in energy stocks requires looking at the granular data of companies to assess these and other critical factors.

Do you have questions about your investments in energy stocks or other financial concerns. Feel free to call me at (205) 989-3498 or email me here.

fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Stock investing involves risk including potential loss of principal.

Why chase the S&P 500? The answer might surprise you. Many investors use the S&P 500 as a benchmark for their investments. Often, however, this can derail an investor from their life long financial dreams and goals.

Note: Originally posted on November 21, 2013 but still applicable for investors today.
Greg Powell, CIMA
President/CEO
Wealth Consultant

“Greg, should I be in or out of the market?” This is a question I get asked often and many investors base their portfolio decisions on this question. If you were to ask me this question, my answer would depend on your financial blueprint, your economic situation, and how much risk you are willing to take in the markets.

Potential hot sectors in the market

You can find opportunities in the markets by tracking sectors. Hot sectors in the markets go in rotations. For example, in early 2014, the hot sector was the energy sector. Then it moved to the international sector. As the school year approached, the hot sector became retail. What investors need to understand is that money is moving in and out of the market all the time. Does that mean people are pulling their money out of the market for a certain amount of time? Not necessarily. They could be just moving from one hot sector to another.

Moving to cash or the next hot sector

When you have political tension in Middle East, the military equipment manufacturing sector may benefit. So as you look at the markets, the question is not whether you need to move out of the market and into cash, it’s how to move to where the trends are. There will be times when you need to be proactive and move a portion of your portfolio to cash. As you watch and understand the trends according to what is going on in the US and international economies, you will be able to make better decisions about your portfolio.

How to find opportunities in the market

We are constantly researching the next hot sector and trend but we are not day traders. At times we will go into certain sectors and hold those positions for 5 to 10 years. There will be other positions in a portfolio that we realize have gone as far as they can in this economic cycle. For those positions it is time to take the profits and place them in another sector that is potentially undervalued. If you keep this kind of portfolio strategy, you will always find opportunities in the market, even among the chaos.

Do you need to be in or out of the market?

If you would like to talk with me about your current investments and portfolio, please email me here or call me at (205) 989-3498. I would be delighted to talk with you.

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Greg Powell is President and CEO of fi-Plan Partners, an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Stock investing involves risk including potential loss of principal.

Investing in a specific sector involves additional risk and will be subject to greater volatility than investing more broadly.

What is value investing? It’s a term that is used often in the investment industry. Here is an easy to understand explanation of value investing from our “Financial Intelligence” video series.Note: This video was originally posted on August 7, 2013. Since we’ve been asked about this term lately, we decided to post it again. Let me know what you think.